Paris Court of Appeal overturns decision against Russia on compensation of Ukrainian Oschadbank's Crimean assets

News
Canan Kevser
31 March 2021, 18:24
Canan Kevser
31 March 2021, 18:24

The Court of Appeal of Paris has overturned a decision by the investment arbitration in the Oschadbank vs Russia case, ruling that the arbitration court had no jurisdiction over Ukraine's state-run Oschadbank's illegally expropriated assets in Russia-occupied Crimea.

According to the media, the court handed down the ruling on March 30, 2021. The court's recent ruling can be appealed in the Court of Cassation of France.

The Paris Court of Appeal upheld a position of the Ministry of Justice of the Russian Federation about the absence of jurisdiction in arbitration on the $1.3 billion claim lodged by the Ukrainian Oschadbank.

Russia has appealed against the decision on compensation for losses to the National Court at the place of arbitration. On March 30, the Court of Appeal upheld one of the Russians' claims and overturned the arbitral tribunal's decision.

The Investment Protection Agreement, under which the Ukrainian side filed its lawsuit, became effective in Ukraine on January 1, 1992, whereas Oschadbank started operating in Crimea before that date, shortly after the collapse of the Soviet Union in 1991.

Oschadbank to appeal against the decision

On the other hand, the Oschadbank said it would immediately appeal the recent decision of the court, its press service informed on March 30.

“As it became known, today the Paris Court of Appeal rejected the award of the Permanent Court of Arbitration of November 26, 2018, in the case of Oschadbank v. the Russian Federation to compensate for the losses incurred in Crimea caused by the annexation of the peninsula. Oschadbank considers such a decision of the Court of Appeal to be erroneous from the point of view of law and contrary to the established case law both in France and in other European countries. The Bank plans to appeal against this ruling immediately,” it said.

As noted, the Paris Court of Appeal did not take into account the specifics of protecting the rights of foreign investors in accordance with international agreements and their relationship with the remedies offered by arbitration. In addition, the correctness of the application of procedural law and the scope of powers of the appellate court are currently being considered.

“We are confident that the judgment of the Court of Appeal will be overturned in the next instance and the award of the Permanent Court of Arbitration of November 26, 2018, on compensation for losses caused by Russia’s annexation of Crimea will remain in force, as was done in other investment cases involving the Russian Federation,” the press service stressed.

Disinformation from the Russian side

The Russian Justice Ministry has already announced its victory in the case. The ministry's reports contain misinformation, Ukrainian media says.

Media sources and official reports on the relevant decision indicate the falsity of the Russian Federation's statements that it would allegedly set a precedent for other cases involving Ukrainian investors, which are being considered by arbitration and state courts in European jurisdictions.